Save Article

Hurdles to GrainCorp, ADM Deal

By

WSJ Staff

Oct 22, 2012 9:41 pm ET

Bloomberg

Silos hold grain for export at GrainCorp Ltd. in Portland, Australia.

U.S. grain handler Archer Daniels Midland Co. will have to sweeten its 2.7 billion Australian dollar (US$2.79 billion) takeover bid for Australia’s GrainCorp Ltd., early investor reactions suggest, as a series of offers globally for grain assets drive up valuations for the country’s last significant independent agribusiness.

Once a quiet sector for mergers, grain traders are in hot demand. This year, Switzerland’s Glencore International made a $6.2 billion offer for Canada’s Viterra Inc. and Japanese trading house Marubeni made a $3.6 billion bid for Gavilon Group of the U.S.

Rapid urbanization and rising wealth in China and India, the world’s most populous nations, are driving demand for westernized diets. Global trade in wheat, barley and canola is expected to double by 2050, according to the U.S. Department of Agriculture and the International Grains Council. Read more on Deal Journal Australia.